By 2020, consumers may not turn to banks to get the financial services they need. We are already seeing other companies invading the space traditionally reserved for financial institutions. The reason? “Fintech” – financial technology – which is innovative new technology and software aiming to compete with traditional methods in the delivery of financial services to the consumer.

For those who might not know what Fintech is, it’s simply the use of software solutions for financial transactions – global examples include Google Wallet, Apple Pay, Wonga and a myriad of other solutions that are offered online or via mobile phones. Some examples include M-Pesa, SnapScan and Nomanini, to name but a few. To indicate the scale of Fintech, back in 2014 already, investment in the US had tripled to $9,89 billion, with Europe investing $1,5 billion.

The disruption caused by Fintech has changed the banking world as we know it. The Financial services industry has been in existence since the 14th century and has always stood the test of time. However, recently it has had to adapt to keep up with the technology evolution. This Goliath has no doubt been shaken up by modern technology’s David – the Fintech revolution.

For traditional financial institutions, the risk of disruption is real, as Fintech companies use the internet, mobile phones, cloud computing and open-source software to make banking and investing more efficient. These Fintech start-ups offer existing financial services at lower costs and offer new tech-driven solutions, not previously available and driven by traditional banks. Financial institutions – both legacy and start-ups – are also driving technology-focused solutions such as peer-to-peer payments, crowdfunding, mobile payments and transfers, and on-demand insurance. Examples here include Avant, Lending Club, Qufenqi, Affirm and SocietyOne.

What does Fintech mean for agriculture?

In South Africa, Post-demonetisation, digitisation of milk procurement is getting a massive boost in organized segment which represents 20% of India’s dairy industry. Cooperatives and private companies are looking for digital solutions for direct credit to cattle owners’ accounts to ensure uninterrupted supply of milk despite currency shortage. Post-demonetisation, digitisation of milk procurement is getting a massive boost in organized segment which represents 20% of India’s dairy industry. Cooperatives and private companies are looking for digital solutions for direct credit to cattle owners’ accounts to ensure uninterrupted supply of milk despite currency shortage. Post-demonetisation, digitisation of milk procurement is getting a massive boost in organized segment which represents 20% of India’s dairy industry. Cooperatives and private companies are looking for digital solutions for direct credit to cattle owners’ accounts to ensure uninterrupted supply of milk despite currency shortage.PICSA is a ground-breaking organisation whose primary aim is to responsibly protect and assist the low-end, economically active population through the provision of credit solutions. At the core of their offering is the savings platform, offering members real returns by saving as little as R25 a month. Their comprehensive products scale to cater to every stage of the saving journey, thereby contributing to the financial well-being of employees in the agricultural sector.

With the pace of technology developing so quickly, it is difficult to say what the next 10 years will look like. For agricultural financial services and its customers, it may mean the possibility of loans backed by cryptocurrency – currencies such as Bitcoin which only exist online – by 2025. What is important though is that AFGRI as a company, the agricultural sector as an industry, and South Africa as country do not get left behind.